Caesars Entertainment creates new firm that will focus on online gaming.

Ever since the Department of Justice in December 2011 clarified their stance on online gambling, both States and gambling companies have been gearing up for this emerging market and making moves to get in it for the long run. Caesars Entertainment Corporation not only has applied for gaming licenses in both Nevada and New Jersey, but are now are creating a new spin-off venture called Caesars Acquisition Co. that will actively pursue online gambling opportunities. For those not sure exactly what that means, is that Caesars is building a company with lots of cash that will essentially acquire or develop companies that are specifically made for online gaming properties. But they are going to need the cash to do it, and lots of it if they want to become a dominant player in the US marketplace.

What better way to do that than with investors to help build your bank roll starting with current shareholders to get you going? If you’re a shareholder in Caesars now that means you’ll given the right to purchase one share of the new company at a bargain basement price of just $9.40 each. Seems that was the good news the market wanted to hear and shared in Caesars jumped 12% on trading. It will be offering about US1.8 billion of it’s stock that they will use to start the venture.

In the regulatory filing they indicated that the new venture would seek to purchase or build assets as they said, that would focus on online gaming company development or ‘strong value creation potential and leveraging interactive technology with well-known online brands’. This could possibly mean that all those European companies that have been in the industry for many years could be offered a pretty penny for their technology if Caesars so desires to purchase them. This all seems logical, as there are lots of non US companies that are profitable in the sector, have the proven technology and they could take them over and embed them into the Caesars portfolio and grow the online division rather quickly.

They obviously did their homework and realized just what it would take to create, produce and maintain such things as casino software, back office technology, reliable affiliate programs and so forth. Why not just buy it instead of build from scratch? Keep in mind that Caesars isn’t entirely new to online gambling either, as they own the World Series of Poker brand and in fact their interactive unit generated $207 million in revenue through their social and mobile gaming initiatives. They’ve even have online gaming properties in the UK, France and Italy so they know what it takes to get in the online gaming business and stay there for years.

Now that the US market in opening up this is a good time to begin their domination and take a strong hold in the online gaming market. The competition will be taking a close look at their expansion plans and there is surely another US based company that is sure to be headed down the same path. Caesars is truly a household name in America with it’s several casino businesses including 10 casinos on the Las Vegas strip like Flamingo Casino, Planet Hollywood Resort and Casino, Bally’s and another Baltimore casino that is currently under development. At one point in time they were the world’s largest gambling operator but had some major debt issues and does not have any assets in Macua needed to reach the expanding and lucrative Chinese market.

The CEO, Canadian Mitch Garber of Caesars Interactive Entertainment and is now CEO of the new Caesars Acquisition Company and his background in online gambling. Back in 2006-2008 Mitch was the CEO of public company and gaming leader Party Gaming. Garber was instrumental in the acquisition years that Party Gaming underwent which diversified the business through purchasing companies and expanding its new product development. He left Party Gaming back in 2008 and has never looked back. The head office for Caesars is in Montreal with 500 employees split between Tel Aviv, Ukraine, Belarus and Santa Monica.

They have also become one of the largest social mobile app development companies in the world. Garber plans on hiring more developers in Montreal and keeping the head office there and they are developing a sophisticated online poker platform. They plan on starting to take bets in the Nevada this summer and overall the future looks great for the company. Now with this online venture getting the funding it needs from shareholder, they are poised to become the major players in the online gaming industry. Now it’s just a matter of time before he puts all this new money to work and looks to buy some companies. Surely, they have some companies on the radar that they will be going after first.